Category: Strategy


Exposed: The Shocking Truth Banks Don’t Want You to Know About Subprime Lending!

How to start a consumer loan business

I appreciate the acknowledgment that banks are stepping into a space that non-traditional, Alternative Financial Services lenders [AFS] lenders have served for years: short-term, small-dollar loans [$50 to $1500] for individuals needing immediate financial assistance. 

However, while banks may be newcomers to this arena, it’s essential to understand that they have not improved upon what specialized [AFS] subprime lenders have been offering for years.

In fact, subprime lenders play a crucial role in providing financial solutions to a huge demographic underserved by traditional financial institutions.

Facts About Small-Dollar Loans

Facts About Small-Dollar Loans

  • Availability and Regulation
  • Small-dollar loans are available by state-licensed lenders in 30+ states and are highly regulated.
  • Usage Statistics
  • About 16 million households use these types of loans annually.
  • Loan Costs
  • The average fee for a single-payment small-dollar loan is $15 per $100 borrowed. You’re paid 1X per month? Borrow $100 and pay $115 on your next payday. [Fully disclosed on lenders websites and B & M walls.]
  • The monthly payment for an installment loan is dependent on the loan’s term.
  • Consumer Satisfaction 96% of borrowers find small-dollar loans to be useful.
  • Consumer Complaints
  • Small-dollar loans constitute only 1.5% of all consumer complaints submitted to the Consumer Financial Protection Bureau (CFPB).
  • Complaints about small-dollar loans have been on a consistent decline for 22 straight months.
  • Complaint Nature
  • Both CFPB and Better Business Bureau (BBB) data suggest that most complaints about small-dollar loans are related to scams rather than regulated lenders.
  • Financial Resilience
  • Approximately 65% of USA households struggle with an unanticipated expense of $400.
  • Approximately 160,000,000 USA residents live paycheck to paycheck!
  • Approximately 40% of USA households earning > $100,000 annually live paycheck to paycheck.
How many people need a payday loan

Pros & Cons of Small-Dollar Loans by AFS Lenders


  • Banking Requirements
  • An active checking account is necessary.
  • Income Verification
  • Proof of income is required.
  • Identification
  • Valid identification must be provided.
  • Age Limit
  • Applicants must be at least 18 years old.
  • Accessibility
  • Subprime lenders offer services to people who may not even qualify for a bank’s small-dollar loans. A significant number of these individuals may not have a long-standing relationship with a bank or fail to meet other criteria.
  • Access: From the comfort of their home, office, school, bicycle… borrowers can apply for a small-dollar loan and access their funds within minutes.
  • Immediacy
  • Speed! Subprime lenders specialize in fast approvals and disbursements, often providing lifelines for people in emergencies the SAME DAY!
  • Cash: 
  • Many subprime lenders dispense cash into their clients’ hands within minutes
  • Debit Cards: 
  • Subprime lenders can deposit loan proceeds onto a client’s debit card in seconds.
  • Simplicity:
  • Less red tape and bureaucracy are involved when borrowing from specialized subprime lenders, making it more straightforward for borrowers.
  • Credit History Flexibility:
  • While most banks will check your credit, many subprime lenders offer loans without a credit check or with lenient credit requirements.
  • Financial Inclusion:
  • Subprime lenders serve a demographic ignored by traditional banking institutions, thus promoting financial inclusion.
  • Quick Turnaround
  • Time-sensitive financial needs are met more readily.
  • Niche Expertise
  • Specialized subprime lenders have more experience in assessing risk in their clientele and can often offer more customized solutions.
  • Disclosure: Legitimate lenders 100% disclose all fees, the APR…
  • Regulatory Scrutiny
  • Subprime lenders are subject to intense scrutiny and regulation, making it expensive for them to operate.
  • Competition: Online and storefront competition for customers is intense. Great for borrowers!


  • Higher Interest Rates
  • The interest rates are higher than bank loans due to the level of risk involved.
  • Repayment Terms
  • Some loan products require quick repayment, which can be challenging for some borrowers.
  • Credit Building: AFS lenders rarely contribute to improving their customers’ credit scores. [This is evolving.]



  • An active checking account is necessary.
  • Typically, this checking account must be seasoned for a minimum of 6 months!
  • Income Verification
  • Proof of income is required. [Gig workers need not apply!]
  • Identification
  • Valid identification must be provided.
  • Age Limit
  • Applicants must be at least 18 years old.
  • B of A Example: You must have a Bank of America checking account that has been open for at least 1 year or 2.5 years if you don’t have a credit score. [B of A is a typical example!]
  •  Account History: You must have a positive balance in your Bank of America checking account and make regular monthly deposits.
  • Direct Deposit: Direct deposit of your income into your B of A  account is mandatory. Thus, banks have virtually zero risk of default! Hence their low fees unless the borrower experiences a $35 NSF fee.
  • You cannot have an open Balance Assist loan and must not have opened 6 Balance Assist loans in the last 12 months.
  • Credit-based factors are also considered in your eligibility. [Subprime consumers have credit issues! Always!!]

Readers Pay Attention: For U.S. Bank’s Simple Loan, you must have a personal checking account open for at least six months, with three months of recurring direct deposits. In both cases, the bank will check your credit. The application is on the bank’s website and mobile banking app. 

[You can’t even walk into their Branch for this loan IF you could qualify!]

“We know when consumers are in financial distress, they focus on speed to get the money. Is it a sure thing, and how long will it take to get approved?” says Alex Horowitz, principal officer focusing on consumer finance for the Pew Charitable Trusts. “These loans are available 24/7. You can get it from your phone or laptop, and the money is in your account within minutes.”

Friends, IS THIS A HORRIFIC JOKE on folks who need help TODAY?

Readers, is this a joke?

  • A Typical Bank Disclosure: To be eligible to apply for a small-dollar loan, applicants must have an open U.S. Bank personal checking account with recurring direct deposits.
  • Positive Balance: Must maintain a positive balance and make regular deposits. Each checking account in which you are an owner or co-owner must have a positive balance as of the end of the previous business day.
  • NSF Fees: If you don’t have enough money in your account or your linked Balance Connect® for overdraft protection account at the time of a transaction, we’ll decline or return it. Even in Decline All, your account may still become overdrawn. This can happen if your debit card is authorized for one amount, but the final amount is higher (for example, adding a tip at a restaurant).
  • Loan History: Cannot have multiple Balance Assist loans within a year. There is a $5 fee for opening a Balance Assist loan, and there are no other interest or finance charges. To help you compare this to other products in the market, the $5 fee would translate into an effective Annual Percentage Rate (APR) of 5.99% to 29.76%, depending on the amount borrowed. Repayment is made monthly over a period of three months. Example: If you took a $100 Balance Assist loan, your total to repay would be $105 with an equivalent Annual Percentage Rate (APR) of 29.76%, and a payment of $35 due in 30 days, $35 due in 60 days and $35 in 90 days.
  • For every $100 borrowed: you pay a $6 fee. If you borrow $400, your fee will be $24. You’ll pay back a total of $424 in three monthly payments of approximately $141.33 each. Your total cost to borrow (annual percentage rate) will be 35.65%.
  • Credit Factors: Credit history and other credit-related factors are considered.
APR Rates


While it’s promising to see traditional banks offer more solutions to consumers who need small-dollar loans, it’s imperative to remember that they are not the first to do so.

Subprime lenders have been filling this gap for years and continue to offer critical services to those who need them most.

These lenders bring unique advantages such as greater accessibility, quicker turnaround, and a higher level of specialization in serving credit-constrained consumers.

Banks entering this space doesn’t necessarily make them a better or more ethical choice; it merely broadens the options available.

The critical factor is that consumers have choices that suit their financial situations and immediate needs.

In that light, subprime lenders remain vital to the economic ecosystem, providing services many traditional banks are still learning to offer effectively.

What We do:

My Team and I are subprime lending pros and masters of small-dollar loans for the masses.

We know how to launch/improve a consumer loan business and get licensed in any state.

Are you interested in learning more about the Tribal-Sovereign Nation Model? Reach out! We formed Leaning Rock Finance Consulting Group in 2011. We introduce Tribal Economic Boards to lenders.

We can create a business plan to make even the most conservative investor say, “I’ll lend you the money!”

We are website-building wizards, and we’ll set you up with an online loan application process in no time.

We are wizards at selecting loan management software, acquiring customers, processing loan applications, underwriting subprime loans, and funding the loans.

And when it comes to collecting on nonperforming loans, we are like a bloodhound on the scent of a bacon cheeseburger.

So, if you have a voracious desire to enter the “business of lending money to the masses,” come to us, and we’ll make it happen with a touch of humor, fun, and SERIOUS profits!

Let's Brainstorm!


Will a $3.99 Monthly Initiative Revolutionize Accessible Cash Advances for the Average Joe?

How to start a consumer loan business

The Disruptor

Joe Consumer was more than a simple guy living in a modest apartment in Queens. He was a dreamer, an idealist who wanted to bring financial empowerment to millions of Americans. At 32, he’d done his time working for large tech companies, where he learned a lot about what not to do. Joe had a vision, and he called it “The Average Joe Consumer.”

He assembled a small team of like-minded developers, designers, and finance experts. Despite the challenges, they had managed to launch a Cash Advance Program as their primary feature. With only a $3.99/month subscription fee, users could access up to $100 in cash advance with 0% APR and no credit check. The program was designed to help real people with real problems.

What’s New?

“We just reached 1,200 premium customers in three days, guys!” Joe announced during a virtual team meeting. “And our first batch had a payback rate of 72%.”

“That’s fantastic, but we should aim for a 95% payback rate,” Jane, the financial analyst on the team, suggested.

“Agreed. We’ll optimize our underwriting process,” Joe said.

Why Just 1,200 Customers?

They had their reasons. First, they were methodically analyzing payback rates, customer satisfaction, and user experience. Joe believed in slow, organic growth rather than flashy marketing campaigns that could drive subscriptions but wouldn’t necessarily sustain them. And the numbers were encouraging. Of their first 1,200 premium subscribers, 250 had already paid for their second month.

Adjusting To Customer Feedback

Early feedback revealed customers were unhappy with the 2-3 standard business days to transfer funds.

“Okay, team, we’ve got to shorten that. Can we manage same-day ACH transfers?” Joe asked.

“We can, and it won’t cost extra,” Sam, the lead developer, confirmed.

They made the change, and reviews started to improve.

New Features

Joe wasn’t just satisfied with providing cash advances. He wanted to give his customers a comprehensive financial tool. The app’s interface had been redesigned to allow users to easily find offers for personal loans, auto insurance, and credit cards designed to help them build or rebuild their credit.

“Let’s ensure these partnerships actually help people make money,” Joe insisted. “I don’t want useless gimmicks. Each offer must be tested.”

After rigorous testing, they added a segment in their app where people could earn money right from their phones, using services like KashKick.

The Road Ahead

In a market where startups took nearly three years to hit $1M ARR (Annual Recurring Revenue), Joe was ambitious. He wanted to get there in just 18 months.

“Investors are going to love us, trust me,” he said in a group chat with his team. “We have the lowest Customer Acquisition Cost in the industry. Plus, we’re already planning Premium+ features for just $6.99/month. We’ve got this, team!”

They all felt the excitement. It was palpable even through the screens of their devices.

One Year Later

Joe’s optimism proved well-founded. The Average Joe Consumer app reached the $1M ARR mark in just over a year, a significant achievement in an industry fraught with high burn rates and even higher customer expectations. But Joe wasn’t planning on stopping there.

“Team, we’re just getting started. We’ve got millions of people to help. Let’s do this!”

And so they did, each day pushing a little harder to achieve a collective dream, making financial freedom accessible for the average Joe, just like them.

Thus, in a world filled with million-dollar startups and billionaires, Joe Consumer and his dedicated team carved out a place for empathy, responsibility, and real-world impact.

The Average Joe Consumer app isn’t just an app; it is a movement, a beacon of hope for those marginalized by the complexities of the financial world.

And for Joe, it’s was only the beginning.

Inspired by True Finance

Here’s the link: True Finance


🎯 “Maximizing ROI: The Pros and Cons of Pausing Lead Purchases on Mondays and Fridays”

The pros and cons of changing your lead purchasing and staffing strategy.

Resource allocation and strategy optimization are crucial for long-term success in the competitive landscape of consumer lending. 

One proposed strategy is to pause the purchase of leads on Mondays and Fridays, which historically show lower conversion rates and reallocate staff efforts towards converting leads from Tuesday, Wednesday, and Thursday while also focusing on collections.

While this approach seems promising at first glance, weighing the pros and cons is essential to make an informed decision.

What do you think?

Money lender purchasing consumer loan leads


1. Resource Allocation: Focusing on converting leads on high-performing days may maximize the productivity of your staff and, thus, increase the overall effectiveness of your lead conversion rate.

2. Improved Collections: The team will have dedicated time to focus on collections, improving the odds of recovering funds that might otherwise be lost.

3. Quality Over Quantity: By not buying low-converting leads, you can focus on higher-quality leads more likely to convert, increasing your ROI.

4. Cost Savings: You could reduce costs by not purchasing leads on low-performing days (Mondays and Fridays).

5. Data-Driven Decision Making: This approach allows your business to be more agile, making operational decisions based on performance metrics.

6. Staff Morale: Your team might feel more productive and more manageable as they will focus on fewer but higher-quality leads. This could also reduce burnout.

7. Better Customer Service: More time can be allocated to each potential customer on high-performing days, potentially improving service and satisfaction.

8. Analytical Insights: Pausing lead acquisition on specific days could serve as a test phase for analyzing whether this move actually improves conversions, providing valuable data for future decisions.

9. Work-Life Balance: If staff members are not pressured to convert leads on lower-performing days, they may experience a more balanced work schedule.


1. Missed Opportunities: By not buying leads on Mondays and Fridays, you may miss out on potential customers who are only available to interact on these days.

2. Dependency on Fewer Days: By focusing on Tuesday, Wednesday, and Thursday leads, your success becomes overly reliant on the performance of these specific days.

3. Cost of Adjustment: Training staff and adjusting to a new schedule may incur short-term costs, both monetary and in terms of productivity.

4. Limited Data: If the decision to pause on Mondays and Fridays is based on limited data, it might not be a sound long-term strategy.

5. Consumer Behavior: If competitors notice your absence on Mondays and Fridays, they might capitalize on it, potentially offering better deals to attract those leads.

6. Operational Complexity: Juggling different tasks like lead conversion and collections could complicate operations, making it harder to focus and excel on either.

7. Market Fluctuations: Consumer behavior isn’t static. By the time you implement this change, the trends that led you to make this decision might have shifted.

8. Cannibalizing Resources: The focus on collections might use resources that would otherwise be used for acquiring new customers, leading to stagnant or declining growth.

9. Legal Implications: Increased focus on collections could bring additional scrutiny, especially if aggressive tactics are used, which can be a legal liability.

10. Reputation Risk: An aggressive focus on collections could harm your reputation among consumers.

11. Employee Turnover: The change might not be well-received by all staff, especially those who have specialized in lead conversion and may not be as adept or willing to focus on collections.


Making changes to your lead purchasing and staff allocation strategy is a significant decision that impacts multiple aspects of your business—from financials to operations and employee morale. 

While considerable advantages exist, such as improved resource allocation, cost savings, and a focus on higher-converting leads, the downsides must be addressed. 

These include missed opportunities, dependency on a limited number of days for leads, and potential reputational risks. A thorough, data-driven analysis should be the first step before implementing such a change. 

Additionally, considering a trial period and closely monitoring metrics could offer further insights into whether this strategy will achieve the desired optimization. 


Subprime Lender Loan Charge-Off Rate (LCR) – Definition and What It Measures

Loan Charge-Off Rate (LCR) – Definition and What It Measures

The Loan Charge-Off Rate (LCR) is a Key Performance Indicator (KPI) that quantifies the rate at which a lender’s loans are deemed unlikely to be recovered and written off as a loss. It measures the risk and effectiveness of a lender’s credit decisions and recovery efforts. It is calculated by dividing the total value of loans charged off during a specific period by the total value of the loan portfolio at the beginning of that period.

LCR = (Total value of charged-off loans during the period) / (Total value of loan portfolio at the beginning of the period)

For example, if a lender has a loan portfolio worth $1,000,000 at the beginning of the quarter, and during that quarter, it charges off loans worth $25,000, the LCR for that quarter would be 2.5% ($25,000 / $1,000,000 * 100%).

Importance and Use of LCR for Subprime Lenders

For subprime lenders, the LCR is a critical KPI. Since subprime borrowers are generally considered riskier due to their credit history, the likelihood of loans being charged off is typically higher than with prime borrowers. As such, a subprime lender’s ability to manage and limit its LCR significantly indicates its operational effectiveness and risk management capabilities.

Managing and improving the LCR involves multiple facets, including but not limited to improving underwriting standards, enhancing collections efforts, and possibly restructuring loans. It’s important to note that while lenders want to keep the LCR as low as possible, a too-low rate might suggest overly strict lending standards, which could limit loan volume and overall profitability.

Challenges in Improving LCR

Subprime lenders face several challenges in improving their LCR. Regulatory hurdles, such as limitations on collection practices, can make it more difficult to recover funds from delinquent borrowers. Technological issues may also be a factor, notably if the lender lacks advanced analytics capabilities to predict which borrowers are most likely to default. Additionally, staffing can be a limitation if there are not enough trained personnel to manage collections effectively.

Investor Expectations

Investors in subprime lenders generally understand the higher risk associated with this market segment. However, they still expect lenders to manage their LCR effectively. A high LCR can indicate poor underwriting standards or ineffective collection practices, impacting profitability. Therefore, investors typically prefer lenders with lower LCRs, all other things being equal.

Unique Considerations for Subprime Lending

Given the nature of subprime lending, lenders should be aware of the additional risks this market presents. They should also be prepared to comply with additional regulatory requirements, such as stricter reporting requirements or limitations on collection practices. Borrower expectations may also differ, with subprime borrowers potentially requiring more flexibility in terms of payment schedules.

Signup for more in our Series, “Subprime Lender KPIs.”

I hope this explanation provides a comprehensive overview of the LCR and its implications for subprime lenders. Do you have any other questions, or is there anything else you would like me to expand on? Reach out:

3 ways I Help lenders

How to start a subprime consumer loan business

The Bible

Our 500-page “bible.” How to Loan Money to the Masses!

Consultant: Start a payday loan business


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High Salaries, Low Savings: The Shocking Truth About Americans’ Paycheck-to-Paycheck Living.

A Lending Club Study reveals:

  • 28%: Share of consumers earning more than $200,000 who live paycheck to paycheck
  • 59%: Share of paycheck-to-paycheck consumers with issues paying their monthly bills that noted significant rises in prices for utilities in the past 12 months
  • 48%: Share of consumers living paycheck to paycheck with issues paying bills who pay for health insurance

“Being a money lender is like being a genie, except instead of three wishes, I give people the power to buy things they don’t need with money they don’t have.”

45% of individuals earning more than $100,000 per year lived paycheck to paycheck.

56% of USA consumers don’t have access to $400 when faced with a sudden emergency!

Demand for credit continues unabated! [Other than housing because potential home sellers don’t want to give up their <3% mortgage interest rates!]

“As a money lender, I get to say the two words every person wants to hear: ‘approved’ and ‘money’ (and maybe ‘free pizza’).”

The Study also highlights that individuals in the lower range of the upper-income bracket are particularly at risk of facing paycheck-to-paycheck living. A staggering 54% of consumers earning between $100,000 and $150,000 annually, more than double the median personal income in the U.S., are living paycheck to paycheck. This figure represents a 7 percentage-point increase from July 2022.

The Study’s results indicate that many Americans struggle to make ends meet despite high salaries. Several factors, such as rising inflation, increasing living costs, mounting debt, and a lack of financial planning, contribute to this.

The post-COVID-19 pandemic era has significantly impacted people’s finances, causing them to shift their spending and savings habits. Many consumers strongly desire to break free from the feeling of being confined during the pandemic, both physically and financially.

The Bottom Line?

Access to small-dollar loans is crucial for millions of households across the country.

For many families, unexpected expenses or emergencies can quickly derail their finances, leaving them with few options.

Traditional banks and lending institutions often require lengthy application processes, high credit scores, and collateral, making it difficult or even impossible for those needing the money they require.

On the other hand, small-dollar loans offer a viable alternative for those struggling to make ends meet.

With easy and accessible application processes, lower credit score requirements, and more flexible repayment terms, small-dollar loans provide a lifeline for households needing financial assistance.

We can help millions of families manage unexpected expenses and navigate challenging times by providing access to small-dollar loans.

Here’s the link to the Lending Club Study: Click to Access

Here it is! Our newly updated 500+ page Manual. We thoroughly explain step-by-step how to start & operate a profitable consumer loan business. 

If you doubt our “Bottom Line,” here’s a link to a Study and commentary by Ballard Spahr about the impact of the passage of a 36% APR cap in Illinois: Click to Access


Fast Cash for Your Emergencies: Payday Loans

How to start a consumer loan business

10 Reasons Consumers Living Paycheck to Paycheck Need Access to small Dollar Loans

To cover unexpected expenses, such as car repairs or medical bills, that cannot wait until the next paycheck.

To avoid late fees or overdraft charges on bills that cannot be paid on time due to a lack of funds.

To prevent the need to borrow money from friends or family, which can strain relationships.

To avoid having to sell personal possessions or valuable items to raise money in a pinch.

To avoid having to choose between paying bills and buying necessities, such as food or medication.

To avoid having to use credit cards, which can result in high interest charges and long-term debt.

To avoid having to take on more work or longer hours, which can be physically and mentally taxing.

To avoid having to rely on high-interest alternative lending options, such as pawn shops or car title loans.

To avoid having to take on additional part-time or freelance work, which can be unpredictable and unstable.

To avoid having to dip into savings, which can be detrimental to long-term financial security.

Our Philosophy


How to Start a Car Title Loan Business


Starting a car title loan business can be a great way to make money and be of service. By ensuring you have everything in place and are prepared for the challenges of owning such a small business, you’ll be able to get off on the right foot and make sure your new venture succeeds!

Research the industry.

You can start learning about the industry by reading books, magazines, and articles on car title loans. Most importantly, GET A CAR TITLE LOAN! Also, talk to people in the industry, especially existing car title lenders. Even if you’re planning an online auto title loan business, if possible, visit stores offering title loans, Take photos of the various state disclosures, licenses, and fee breakdowns typically posted in every car title loan storefront location. You can find this info on websites as well. [And, of course,, in our 500+ page PDF Manual.]

To learn more about your competition, you should look at their websites and see how they market themselves. You can also get information from Google Adwords or Bing Ads that will provide you with data about keywords related to your business. You can use this information for keyword research to optimize your website and make sure that it ranks well on search engine result pages (SERPs).

You should also educate yourself about your customers so that you know what their needs are going into the business. This will help ensure you can fulfill these needs when providing services such as funding car title loans and other related products or services like title transfers.

Set your goals.

Before you start your car title loan business, it’s important to set goals. You can’t know whether or not you are achieving your business goals unless you have a clear idea. In the title loan industry, we refer to these as KPIs. [Key Performance Indicators]

There are two things wrong with setting goals before starting a car title loan business:

  • Some people think that it is not necessary because the goal will remain the same throughout their career in this field, and this makes them miss out on opportunities that could have benefited them greatly. This is true only if their goal was “be successful,” which leaves room for interpretation by each individual as long as they were able to achieve success as defined by them.
  • Other people get so caught up trying to achieve other people’s goals. They forget about their unique talents, strengths, and weaknesses which may make all the difference between success and failure when starting up something new like opening up an auto title loan company!

Know the laws.

There are several different laws that, if not followed, could result in serious penalties. For example, when it comes to how much money you can charge or how quickly your borrower must pay back your loan, each state has its own specific rules. It’s important to know these laws and whether they apply to your business, and how they would affect its operations.

Make sure you fully understand the regulations regarding licensing requirements for title loan businesses in your area and state before starting one yourself. There are rarely zero laws where you operate! That’s true for online and storefront auto title loan businesses. Research what other states have done regarding title loan legislation and mimic something similar for yourself (i.e., don’t just copy from another state’s code). If licensing requirements exist but aren’t enforced, then contact officials so they can start enforcing them! After all, YOU paid for your state license, bond…

For example, Texas requires title loan lenders to act as Credit Access Businesses – CABs. It’s crazy, but lenders cannot loan their own money! They must collaborate with a “3rd Party Lender.” [PS: Our Manual, “How to Loan Money to the Masses,” covers this thoroughly!] Know too that some Texas cities have passed city ordinances. You can’t legally offer car title loans in these cities. Solution? Offer car title loans online or set up your storefront in the county. [Again, our Manual covers how to operate in Texas & every other state in which this loan product is legal. ] Conversely, California passed a <36% APR cap on title loans! Every state is different. [If this were easy, everyone would do it 🙂 ]

Develop a plan.

As you begin your car title loan business, it’s important to develop a comprehensive plan. A well-thought-out plan will help you avoid mistakes and ensure that you are on the right path toward success.

Here are the critical components of your plan:

  • Loan product
  • Target market
  • Competition
  • Strengths/weaknesses compared to the competition
  • Financial situation (i.e., how much capital do I have?)
  • Risk tolerance (I can tolerate risk if it means I’ll be more successful in five years)
  • Exit strategy(s)
  • Check out our “Pro Forma Modeling Excel Tool” here: Pro Forma

Choose your location.

The online car title loan model is kicking butt today. Tremendous new tech platforms and GPS devices are revolutionizing our industry. Instant bank verification, same-day funding, AI-powered collection tools, loan management software, and income validation platforms… make lending money online enticing and easier than ever before.

Choosing a physical location for your car title loan business is one of the most important decisions you can make. You want to ensure that your location is accessible to customers and near a busy street or large parking lot. You also want to choose a safe area where there’s not much crime and an area in which many people live, work, and drive around.

The best locations are those with large populations. They have plenty of potential customers who need money fast because they are short on cash after paying their monthly bills, need car repairs, gas to get to work, rent…

Work up a budget.

Before you begin the process of opening your own car title loan business, it’s important to create a budget. This will help you determine how much money you need to invest in your business and how much profit you can expect. To create a good budget for your car title loan business:

  • List all expenses that are related to running your car title loan business. Don’t forget to include costs associated with equipment, software, supplies, marketing expenses, employee salaries, and training costs, insurance coverage (if any), state regulations on how much interest rates must be charged on loans—and anything else that may come up during the course of owning a successful auto title lender!
  • Calculate how much money each month will be spent going forward based on these estimates for operating expenses. Once this number is determined, it should be compared against projected revenue from loans made over time so that there’s an accurate picture of what may happen during different stages of startup operation as well as future growth plans if needed or desired later down the road when demand begins increasing dramatically due to word-of-mouth advertising strategies being implemented effectively not only locally but regionally and online as well. [Again, our “Pro Forma Modeling Excel Tool” is perfect for this!]


Marketing is a key component of running a successful title loan business, but it’s often overlooked. Instead, businesses believe that once they have the product or service ready, all they need to do is advertise, and customers will come. That might be true for some businesses—but for others, like car title loans where people are putting up their cars as collateral and can’t afford any payment defaults or late payments, there needs to be more than just advertising. You also need to build trust with your clients so that when you tell them about your plan to help them get out from under their financial burden and pay back the loan, they believe in what you’re saying and follow through on it.

There are many ways that marketing can be done—from advertising on radio stations with commercials at the beginning of each hour (or whatever time interval) promoting your business; having billboards placed strategically throughout town; posting flyers at local grocery stores and libraries; sending direct mailings via snail mail and emailing, customer referral rewards… There are countless ways to market depending on what business model fits best into yours (i.e., traditional brick-and-mortar store vs. online eCommerce).

To run a successful car title loan business, you must know all its aspects.

To run a successful car title loan business, you must know all its workings. You need to know the laws and regulations that apply to your business. You should know how to develop a plan for starting up and running your car title loan business. You also need to have knowledge of the latest technology for car title loan lenders and acquire car title loan customers by using social media marketing techniques like GMB [Google My Business], Facebook ads, and Google Adwords. [NOTE: several social media platforms do not allow subprime lending ads for loan products that exceed 36% caps! Workarounds exist, and we discuss them in our 500+ page Manual, “How to Start & Improve a Consumer Loan Business.] You must understand how things work so that you can underwrite car title loans effectively with minimal risk of your time and capital.

PS: We have a LONG LIST of resources focused on “lending to the masses” here: Resources


Don’t be afraid to ask questions, and don’t be shy about taking advice from others. You may have a lot of business knowledge already, but remember that there are always new things to learn—and other people who can teach you. Don’t let your pride stand in the way of this opportunity for growth!

Finally, INVEST IN YOURSELF! And always be learning!

Jer Ayles:  The Business of Lending to the Masses

How to start a payday loan business, an installment loan business, a car title loan business...

How to start a payday loan business, an installment loan business, a car title loan business...

Subprime Loan Originations Expected to Soar After Q3

A new Bank Rate study is out! [Link below.]


“As the job market cools down and inflation heats up, a new survey from Bankrate indicates that side hustles are a necessity for a growing number of Americans. Former top motivations for side hustling, like paying off debt and saving, have given way to a more pressing need: making ends meet.”


“Unfortunately, due to high inflation and other financial burdens, more side hustlers are working a side job just to make ends meet,” said Ted Rossman, Senior Industry Analyst for Bankrate. “Instead of using this income to boost savings, knock out debt or pay for a vacation, there has been a big increase in people who simply need these funds just to pay for everyday living expenses.”


“41% of U.S. adults who have a side job in 2022 need the extra income to pay for everyday living expenses as compared to 31%in 2019 (the last year of polling), according to a new survey from are putting this money towards savings(17% vs. 24%in 2019) and using it for discretionary spending (26% vs. 36%in 2019).”


Bottom Line? The near-prime will soon be the subprime. Demand for loans is trending up and will continue to scale rapidly. Opportunities abound for Lenders!




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How-to: Installment Loans for the Subprime Demographic

Example Nevada Installment Loans

There is a national trend by regulators to mandate a 36% APR [Annual Percentage Rate] cap throughout the USA.

Many national Lenders have been transitioning to a multitude of financial loan products in an effort to continue to serve subprime borrowers while still achieving superior ROI. Witness Avant, CURO, WRLD, ENVA… You only need to refer to their latest earnings call to comprehend the extent of this transition away from single-payment products. Enova’s progeny is back in the late ’90s. At the time, they offered singularly payday loans having 400% – 700% APR payday loans. As per their latest Q4 earnings call, these single payment [payday loan] products made up a mere 2% of loan originations. Obviously, they see the writing on the wall.


Nevada, in addition to approximately 25 other States, has Implemented a state database. This demonstrates a death knell for the single payment product!

Luckily, we Lenders have time to evolve our Loan product offerings AND, more importantly, integrate with Fintech platforms that enable us to reduce headcount, and employ artificial intelligence [AI] to acquire, underwrite, service & collect funds without the aid of human intervention; thus reducing our G & A expenses. [Examples: for 24/7/365 debt negotiation & for wages & income verification.]


Grab a copy of our latest version of “How to Lend Money to the Masses Profitably.” 500+ pages of real-world, how-to start, scale, improve and succeed lending cash to the 50%+ of USA households who are FAST running out of money and cannot access $500 cash in order to solve a sudden financial emergency. [Fix their car, keep the lights on, pay for a prescription, make payroll for their construction crew until paid by the homeowner…] For a mere $297.00, you can download our 500+ page PDF and enter/improve/scale a consumer loan business! The business of lending to the Masses. The oldest profession 🙂

How to Start a Payday Loan Business

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